Capital requirements

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Capital requirements

Financing required for the operation of a business, composed of long-term and working capital plus fixed assets.

Capital Requirements

In banking regulation, the amount of money a bank must have available to cover withdrawals, closed accounts, and other account-related expenses. While each jurisdiction computes capital requirements differently, Basel II provides a framework many countries follow; it describes capital requirements as a percentage of a bank's risk-weighted assets. Capital requirements are important for bank solvency, and, in difficult times, reduce the pressure for bank runs.
References in periodicals archive ?
The Department of Trade and Industry (DTI) is open to further liberalization of domestic retail trade to full foreign ownership, but seeks to impose minimum capital requirement for the small and micro retailers to protect the lowly sari-sari stores.
The new regulation sets the capital requirement for each class of insurance business, and requires each insurance company to maintain a minimum capital requirement based on the category of insurance activity being undertaken by a company.
Islamabad -- The Securities and Exchange Commission of Pakistan (SECP), with the approval of its Policy Board, has increased the minimum paid up capital requirement for insurance companies.
The FSC will replace the NCR rules with the 'minimum capital requirement', which includes regulatory capital requirement, capital requirement for client asset management, and capital requirement for proprietary investments.
Calibration of this continuous-time model suggests that the optimal capital requirement exceeds 20 percent of assets, far above the levels proposed in the most recent draft of the Basel III capital standards.
British capital requirement rules don't apply to resident foreign bank branches located in-country but with headquarters abroad.
Bank capital is usually regulated by requiring banks to meet or exceed a minimum capital requirement, which is specified by ratios of various measures of capital to assets.
If they cannot do that, they must merge to reach the new capital requirement.
where: RO--the capital requirement for operational risk, PR--the capital requirements for risks other than credit risk (reflected by the RWA), and operational risk.
He presumes that the mean path for these losses is already cyclical and shows via simulations that a risk-based capital requirement is likely to have procyclical effects, which he suggests can be partially offset only by "judicious calibration" of minimum capital requirements during a downturn.
OFHEO has determined that Fannie Mae's minimum capital requirement was $24.
Many institutions had found ways to hold extensive off-balance-sheet assets that added substantially to risk but carried no regulatory capital requirement.

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